15 Accounting Interview Questions and Answers

When it comes to interviews, accounting questions can be some of the most difficult to answer. This is because they often require a great deal of technical knowledge and understanding. However, with a little bit of preparation, you can ace your accounting interview and land the job you want.

To help you prepare, we’ve compiled a list of sample accounting interview questions and answers that you can use to develop your own responses. These questions cover a range of topics, including financial statements, bookkeeping, auditing, taxes, and more. With these questions and answers in hand, you’ll be ready to take on anything an interviewer throws your way.

1. What is accounting?

This question is a basic one that employers ask to see if you have the accounting knowledge needed for their company. They want someone who can do the job well, so they are looking for an answer that shows your understanding of what accounting is and how it works.

Example: “Accounting is the process of recording financial transactions in order to keep track of money coming into and going out of a business. It’s important because it helps businesses understand where their money is going and whether or not they’re making a profit. There are many different types of accounting, including financial accounting, management accounting and tax accounting.”

2. What are the main responsibilities of an accountant?

This question is a great way to show your interviewer that you have the skills and knowledge necessary for this role. You can answer by listing several accounting duties, such as:

Preparing financial statements
Reconciling accounts
Completing tax returns
Auditing financial records
Managing budgets
Planning payroll
Example: “Accountants are responsible for many important tasks, including preparing financial statements, reconciling accounts, completing tax returns, auditing financial records, managing budgets and planning payroll.”

3. Can you explain what a balance sheet is?

This question is a great way to test your accounting knowledge. Balance sheets are one of the most important documents for accountants, so it’s likely that you’ll be asked about them in an interview. Your answer should include a definition and an example of how you would use a balance sheet in your work.

Example: “A balance sheet is a financial statement that shows the assets, liabilities and owner’s equity of a company at a specific point in time. It’s usually prepared twice a year, but some companies prepare monthly or quarterly reports as well. I’ve used balance sheets throughout my career to track the finances of clients and ensure they’re meeting their budget.”

4. How do you create a ledger in accounting?

This question is a basic accounting test that many interviewers ask. They want to know if you have the skills necessary to perform the job’s duties. Use your answer to highlight your knowledge of how ledgers work and what they’re used for in an organization.

Example: “Ledgers are one of the most important tools in accounting because they provide a record of all financial transactions. I use double-entry accounting, which means every transaction has two sides. One side is debits and the other is credits. When I create a ledger, I first decide whether it will be a general or subsidiary ledger. Then, I enter each account into the ledger twice, once as a debit and once as a credit.”

5. How do you prepare financial statements using double entry accounting?

This question is a great way to test your accounting knowledge and skills. It allows you to show the interviewer how you use double entry accounting to prepare financial statements, which are important documents for businesses. Use examples from past experiences when answering this question.

Example: “Double entry accounting uses debits and credits to record transactions in an organization’s books. I first make sure that all of my calculations are correct before entering them into the system. Then, I enter each transaction twice, once as a debit and once as a credit. This helps me ensure that everything is recorded correctly. After doing this, I can then generate reports using these figures.”

6. Can you explain the difference between accounts receivable and accounts payable?

This question is a great way to test your accounting knowledge and see how you apply it in the workplace. When answering this question, try to explain what each term means and give an example of when you used them in your previous role.

Example: “Accounts receivable refers to money that’s owed to a company from clients or customers. Accounts payable are bills that need to be paid by a business. In my last position as an accountant, I had to make sure all payments were made on time and that we didn’t overspend our budget for accounts payable.”

7. What’s the difference between accrual-based and cash-basis accounting? Which one would you recommend to use in certain situations?

This question tests your accounting knowledge and ability to apply it in real-world situations. When answering this question, make sure you define both types of accounting and explain the differences between them. Then, give examples of when each type would be most useful.

Example: “Accrual-based accounting records revenue and expenses as they occur, while cash-basis accounting only records transactions that involve money. Accrual-based accounting is more accurate because it tracks all financial activity, even if no money has changed hands yet. However, cash-basis accounting can be beneficial for small businesses with low sales volume or seasonal companies that don’t have a lot of expenses.”

8. What are some common types of reports that accountants must prepare as part of their work?

Interviewers may ask this question to assess your accounting knowledge and determine whether you have the necessary skills to complete their company’s reports. To answer, list some of the most common types of reports that accountants prepare and describe what they include.

Example: “There are many different types of reports that accountants must create as part of their work. Some of these include financial statements, tax returns, budget reports and balance sheets. Financial statements provide a summary of an organization’s finances, including its assets, liabilities and equity. Tax returns summarize income and expenses for a specific period of time. Budget reports show how much money is available in a budget category. Balance sheets show the value of an organization’s assets, liabilities and equity at a given point in time.”

9. Why should we learn debits and credits when performing accounting?

This question is a great way to test your knowledge of accounting and how it works. It also shows the interviewer that you understand why certain processes are important in an organization. Use this opportunity to show them that you know what debits and credits are, as well as their importance in accounting.

Example: “Debits and credits are two sides of the same coin when performing accounting. Debits represent money going out of an account while credits represent money coming into an account. These two things balance each other out so that at the end of the day, everything balances. This is important because if there’s no balance, then something may be wrong with the company’s finances.”

10. How does depreciation differ from amortization?

This question tests your accounting knowledge and ability to apply it in real-world situations. You can answer this question by defining each term, explaining how they differ from one another and giving an example of when you used both terms in a project or task.

Example: “Depreciation is the process of allocating the cost of an asset over its useful life. Amortization is similar to depreciation but applies only to intangible assets like patents and copyrights. For my last job, I had to create financial reports for several companies that were applying for government grants. One company was requesting funding for research on new technology. I calculated the amortization period for their patent and included it in the report.”

11. What is your understanding of fixed assets?

This question is a great way to test your accounting knowledge. It also allows you to show the interviewer that you can apply what you know about fixed assets to real-world situations. To answer this question, define fixed assets and explain how they are used in accounting.

Example: “Fixed assets are long-term resources that an organization uses for its operations. They include property, plant and equipment. Fixed assets are recorded on the balance sheet as either current or noncurrent assets. I use fixed assets when calculating depreciation, which is the process of allocating the cost of fixed assets over their useful lives.”

12. What’s the difference between capital expenditures, operating expenses, and repairs and maintenance costs?

This question tests your accounting knowledge and ability to apply it in a real-world setting. When answering this question, you can explain the differences between these costs and how they’re used in an organization’s financial records.

Example: “Capital expenditures are expenses that improve or maintain long-term assets. They include things like buying new equipment, upgrading software or making improvements to buildings. Operating expenses are day-to-day costs of running a business. These include things like utilities, payroll and office supplies. Repairs and maintenance costs are expenses that keep something in good working order. For example, if I have a computer with a broken screen, I would need to spend money on repairs and maintenance to fix it.”

13. What is the importance of accruals?

This question is a great way to test your knowledge of accounting. It also allows you to show the interviewer that you understand how important accruals are in accounting and why they’re necessary. You can answer this question by explaining what accruals are, when they should be used and how they benefit businesses.

Example: “Accruals are an essential part of accounting because they allow companies to record revenue and expenses as they occur instead of waiting until the end of the fiscal year. This helps businesses keep track of their financial information more accurately and it gives them a better idea of whether or not they’ll meet their goals for the current year.”

14. What are some of the most important ratios used for evaluating the performance of a business?

This question is a great way to test your knowledge of accounting ratios. It also allows you to show the interviewer that you can apply what you know about financial statements and accounting reports to real-world business situations.

Example: “There are many different types of ratios used for evaluating the performance of a business, but some of the most important ones include the profit margin ratio, asset turnover ratio, return on assets ratio and debt-to-equity ratio. These ratios help me understand how well a company is performing financially by comparing its sales revenue with its expenses, how efficiently it uses its assets to generate revenue, how much money it makes from using its assets and how much debt it has compared to its equity.”

15. What do you understand about GAAP compliance?

This question is a great way to test your knowledge of accounting standards. It’s important for an accountant to understand the guidelines and regulations that apply to their work, so employers ask this question to make sure you have the necessary experience with GAAP compliance. In your answer, explain what GAAP stands for and how it applies to accounting. If you’ve worked in an environment where GAAP was important, share a specific example of how you helped ensure compliance.

Example: “GAAP stands for Generally Accepted Accounting Principles. These are the rules and regulations that dictate how accountants should perform their work. I understand that these principles help protect investors from fraudulent financial reporting. When working at my last job, I had to ensure our company complied with all aspects of GAAP. This included making sure we used appropriate methods when recording revenue and expenses.”